5 ways saving money can end up costing you more

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5 ways saving money can end up costing you more


Cutting back and opting for frugal alternatives may help you save money initially, but is going with a more affordable option always best? It could be, but not necessarily. There are instances where your cost-cutting measures can backfire and you may end up paying more than you anticipated.

Here are five ways common cost-cutting methods can backfire.

1. Going extreme with coupons

Coupons can save you a significant amount of money. However, for frugal-living expert Lauren Greutman, doing so backfired in a big way when she took the couponing a bit too far.

"When I was trying to get out of debt, I'd spend too little money at the grocery store. I would only use coupons and try to save money as much as I could," she says.

However, only using coupons to buy things cut her budget to the bone, which left her hungry for more -- literally. "I'd resort to ordering takeout," she says.

When paying off debt and using coupons, Greutman recommends a more balanced approach to budgeting and saving money. For example, consider meal planning and being realistic about what you need for a healthy diet.

2. Switching to a low-cost phone provider

Many people have smartphones, but depending on your plan, data can be costly. When you're looking at your phone bill and see an attractive offer elsewhere, you may be tempted to jump ship and opt for the cost savings.

However, switching plans doesn't always work out to be cheaper.

Jason Vitug, founder of personal finance website Phroogal.com, (full disclosure: I'm currently working for and with Jason as an event planner) says he switched cellphone companies to cut his costs in half -- but ended up with bad service.

"It turned out to be a hassle, and the network isn't as friendly for travelers. As I depend on my smartphone to conduct my business, I should have considered much more than saving dollars by switching," he says.

Ultimately, this switch could end up being frustrating when you can't communicate with loved ones or run your business, and it can become costly if you have to pay fees for additional coverage areas or features.

If you're looking to save money on your current phone plan, consider calling up your service provider and asking for a discount. There's no harm in negotiating. And if you do opt for another provider, do your research on the company's service, options and pricing to be sure you're getting a better deal than you already have.

3. Downsizing to a cheaper car

Vehicles can be expensive, and one way to minimize costs is to downgrade and get a cheaper car. Instead of having a nicer, newer car, why not opt for something more affordable?

While downsizing to a cheaper car may feel like the right option to save money, it's not always your best bet.

"When we first started our debt-free plan in August 2013, we decided to sell my husband's car, a 2004 Subaru WRX, and buy a cheaper car for him to drive," says Monica Louie, founder of personal finance blog OurDebtFreeFamily.com.

After purchasing the cheaper car, though, trouble started to roll in. "Within a couple of weeks, the check-engine light came on," she says.

The "deal" ended up not being worth it in the long run, with all the repairs required, not to mention the hassle and stress of having a car start breaking down shortly after buying it.

"We learned that we always need to do our due diligence when making a large purchase like a car and always get a second opinion, no matter how great of a deal we think we're getting," Louie says.

4. Cutting the cord

Personal finance sites often suggest ditching cable as a way to save money. Why spend close to $100 per month on cable when you can opt for something like Netflix for around $10 per month instead?

While cutting the cord may seem like a good idea, some people who have made the switch are realizing it's not all it's cracked up to be, citing limited options, broadcast delays and frustrating service.

In addition, cutting the cord can seem like it's saving you money, but if you keep going to the bar to watch the live sports games, you could end up spending more than you're saving.

Before cutting the cord, think about what you value, and weigh the trade-offs of what you'll lose and gain. If having access to certain channels can help you stay frugal at home, perhaps cutting the cord isn't the cost-saving measure for you.

5. Trying to DIY

Instead of spending money on something, you may be tempted to do it yourself. Pinterest and YouTube tutorials make DIY projects an attractive cost-saving measure.

However, not leaving it to the professionals can mean spending a lot of time on a project and could lead to frustration.

Liz Stapleton, founder of blog Friday Night Shenanigans, tried to make her own drink tray with old bottle caps. While it seemed like a fun and frugal project initially, it turned out to be time-consuming and painful.

"The time it took to flatten the caps -- not to mention how many times I hit my thumb while doing it -- was just not worth it," Stapleton says.

If you're thinking of DIY-ing it, it's important to weigh the costs of the materials as well as the time.

If it ends up taking you four times as long and leads to an unpleasant experience, it may be worth spending some cash to have it handled by someone else.

Some common instances where it may be better to hire a professional rather than DIY include plumbing or carpenter jobs - typically, any task that requires technical knowledge that you don't have.

Bottom line

When it comes to cost-saving measures, you'll want to look carefully at your other options and ask yourself if it's really worth it. Sometimes trying to save a few bucks can lead to spending more time on something (which you could use to make more money on the side) or even losing money in the long run.

About the Author: Melanie Lockert is a freelance writer and event planner currently living in Los Angeles. She is the author of Dear Debt: A Story About Breaking Up With Debt. She has been featured on Oprah, Huffington Post, Business Insider, The Globe and Mail and more.

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